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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


June 2014
Vol. XV, No. 6
[pdf version]

CONTENTS


FAC 2005-74 Requires CAGE Codes, Repeals Recovery Act Reporting Requirements
Proposals Sought for NAICS 2017
Increased Wholesale, Retail Size Standards Proposed
DOD Continues Revising Clauses with Alternates



FAC 2005-74 Requires CAGE Codes,
Repeals Recovery Act Reporting Requirements

Federal Acquisition Circular (FAC) 2005-74 conducts a little housekeeping. It contains five final rules that amend the Federal Acquisition Regulation (FAR) to: (1) require Commercial and Government Entity (CAGE) codes; (2) repeal the Recovery Act Reporting requirements; (3) expand the applicability of the senior executive compensation benchmark; (4) limit the contractor comment period on past performance evaluations; and (5) clarify the responsibilities of contractors under the Defense Base Act.



Proposals Sought for NAICS 2017

The Office of Management and Budget (OMB), through the Economic Classification Policy Committee (ECPC), is soliciting proposals for changes to the structure and content of the North American Industry Classification System (NAICS) for inclusion in a potential 2017 revision.

The following are the four areas for which proposals and comments are being sought:

Comments must be submitted no later than July 21, 2014, by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov (search for “NAICS for 2017”); (2) fax: 301-763-8744; (3) mail: John Murphy, Chair, Economic Classification Policy Committee, Census Bureau, Room 8K157, Washington, DC 20233-6500; or (4) email: John.Burns.Murphy@census.gov.



Increased Wholesale, Retail Size Standards Proposed

As part of its ongoing comprehensive small business size standards review, the Small Business Administration (SBA) is proposing to increase the small business size standards for 46 of the 71 industries in North American Industry Classification System (NAICS) Sector 42, Wholesale Trade, and for one industry in NAICS Sector 44-45, Retail Trade, that has an employee-based standard. (EDITOR’S NOTE: All other industries in NAICS Sector 44-45 [except NAICS 441110, New Car Dealers] have small business size standards expressed in terms of annual receipts. The small business size standard for NAICS 441110 was converted from $29.0 million in annual receipts to 200 employees when the small business size standards for the NAICS Sector 44-45 industries were last revised – see the November 2010 Federal Contracts Perspective article “SBA Increases Size Standards in 69 Industries.”)

The following are the industries, their current small business size standards, and their http://www.gpo.gov/fdsys/pkg/FR-2014-05-19/html/2014-11269.htmproposed small business size standards:

NAICS Code Industry Title Current Size Standard Proposed Size Standard
Sector 42
423110 Automobile and Other Motor Vehicle Merchant Wholesalers 100 employees 250 employees
423120 Motor Vehicle Supplies and New Parts Merchant Wholesalers 100 employees 200 employees
423130 Tire and Tube Merchant Wholesalers 100 employees 200 employees
423310 Lumber, Plywood, Millwork, and Wood Panel Merchant Wholesalers 100 employees 150 employees
423320 Brick, Stone, and Related Construction Material Merchant Wholesalers 100 employees 150 employees
423330 Roofing, Siding, and Insulation Material Merchant Wholesalers 100 employees 200 employees
423410 Photographic Equipment and Supplies Merchant Wholesalers 100 employees200 employees
423420 Office Equipment Merchant Wholesalers 100 employees 200 employees
423430 Computer and Computer Peripheral Equipment and Software Merchant Wholesalers 100 employees 250 employees
423450 Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers 100 employees200 employees
423460 Ophthalmic Goods Merchant Wholesalers 100 employees 150 employees
423490 Other Professional Equipment and Supplies Merchant Wholesalers 100 employees 150 employees
423510 Metal Service Centers and Other Metal Merchant Wholesalers 100 employees 200 employees
423610 Electrical Apparatus and Equipment, Wiring Supplies, and Related Equipment Merchant Wholesalers 100 employees 200 employees
423620 Household Appliances, Electric Housewares, and Consumer Electronics Merchant Wholesalers 100 employees200 employees
423690 Other Electronic Parts and Equipment Merchant Wholesalers100 employees 250 employees
423710 Hardware Merchant Wholesalers 100 employees 150 employees
423720 Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers100 employees 200 employees
423730 Warm Air Heating and Air-Conditioning Equipment and Supplies Merchant Wholesalers 100 employees 150 employees
423810 Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers 100 employees 250 employees
423860 Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers 100 employees 150 employees
423920 Toy and Hobby Goods and Supplies Merchant Wholesalers 100 employees 150 employees
424110 Printing and Writing Paper Merchant Wholesalers 100 employees 200 employees
424120 Stationery and Office Supplies Merchant Wholesalers 100 employees 150 employees
424130 Industrial and Personal Service Paper Merchant Wholesalers 100 employees 150 employees
424210 Drugs and Druggists’ Sundries Merchant Wholesalers 100 employees 250 employees
424320 Men’s and Boys’ Clothing and Furnishings Merchant Wholesalers 100 employees 150 employees
424340 Footwear Merchant Wholesalers 100 employees 200 employees
424410 General Line Grocery Merchant Wholesalers 100 employees 250 employees
424420 Packaged Frozen Food Merchant Wholesalers 100 employees 200 employees
424430 Dairy Product (except Dried or Canned) Merchant Wholesalers 100 employees 200 employees
424440 Poultry and Poultry Product Merchant Wholesaler 100 employees 150 employees
424450 Confectionery Merchant Wholesalers 100 employees 200 employees
424470 Meat and Meat Product Merchant Wholesaler 100 employees 150 employees
424490 Other Grocery and Related Products Merchant Wholesaler 100 employees 250 employees
424510 Grain and Field Bean Merchant Wholesalers 100 employees 200 employees
424610 Plastics Materials and Basic Forms and Shapes Merchant Wholesalers 100 employees 150 employees
424690 Other Chemical and Allied Products Merchant Wholesalers 100 employees 150 employees
424710 Petroleum Bulk Stations and Terminals 100 employees 200 employees
424720 Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals) 100 employees 200 employees
424810 Beer and Ale Merchant Wholesalers100 employees 200 employees
424820 Wine and Distilled Alcoholic Beverage Merchant Wholesalers 100 employees 250 employees
424910 Farm Supplies Merchant Wholesalers 100 employees 200 employees
424920 Book, Periodical, and Newspaper Merchant Wholesalers 100 employees 200 employees
424940 Tobacco and Tobacco Product Merchant Wholesalers 100 employees 250 employees
424950 Paint, Varnish, and Supplies Merchant Wholesalers 100 employees150 employees
                    
Sector 44-45
454310 Fuel Dealers 50 employees 100 employees

Comments on the proposed changes to Sectors 42 and 44-45 are to be submitted no later than July 18, 2014, identified as “3245-AG49,” by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) mail/hand-delivery/courier to: Khem R. Sharma, PhD, Chief, Size Standards Division, 409 Third Street, SW, Mail Code 6530, Washington, DC 20416. SBA will not accept comments by e-mail.



DOD Continues Revising Clauses with Alternates

The Department of Defense (DOD) is continuing its revision of Defense FAR Supplement (DFARS) provisions and clauses that have alternates by proposing to create “overarching prescriptions” for clauses with one or more alternates pertaining to special contracting methods (DFARS part 217), major system acquisitions (DFARS part 234), and service contracting (DFARS part 237). In addition, separate prescriptions for the basic clause and its alternate(s) would be added, and the text of the alternate would be included in the DFARS in full. This effort is being conducted to clarify clause usage and facilitate the use of automated contract writing systems. These proposed changes do not affect the meaning or applicability of the clauses.

The affected clauses are:

The naming convention results in proposed new clause titles, for example, Exercise of Option to Fulfill Foreign Military Sales Commitments – Basic, and Exercise of Option to Fulfill Foreign Military Sales Commitments – Alternate I.

An umbrella prescription is proposed to be added for the elements common to the basic clause and the alternate(s). The specific prescription for the basic clause and alternate would then address only the requirements for their use that enable the selection of the basic or the alternate(s). For example, the prescription in DFARS 217.208-70, Additional Clauses, would be revised to read as follows: “Use the basic or the alternate of the clause at [DFARS] 252.217-7000, Exercise of Option to Fulfill Foreign Military Sales Commitments, in solicitations and contracts when an option may be used for Foreign Military Sales requirements. Do not use the basic or the alternate of this clause in contracts for establishment or replenishment of DOD inventories or stocks, or acquisitions made under DOD cooperative logistics support arrangements. (1) Use the basic clause when the Foreign Military Sales country is known at the time of solicitation or award. (2) Use the alternate I clause when the foreign military sale country is not known at the time of solicitation or award.”

In addition, the presentation of the text of alternates would no longer consist solely of paragraphs that are different from the basic clause, but would instead include the entire full text of the alternate clause. The inclusion of the full text of each clause alternate is expected to make the terms of a clause alternate clearer to offerors and to DOD contracting officers. Inapplicable paragraphs from the basic version of the clause that are superseded by the alternate would not be included in the solicitation or contract to prevent confusion.

Comments on the proposed rule must be identified as “DFARS Case 2014-D004” and submitted no later than July 28, 2014, by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: osd.dfars@mail.mil; (3) fax: 571-372-6094; or (4) mail: Defense Acquisition Regulations System, Attn: Janetta Brewer, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.

In addition, DOD issued the following final rules:



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